Premium Financing: Right for You?
A powerful tool for your estate planning consideration
As old insurance company ads used to proclaim, “Life insurance isn’t for the one who dies. It’s for the ones who live.”
Even though you may have accumulated enough assets to provide a secure retirement, and an endowment to pass on to following generations, life insurance can serve an important role in your estate planning. The important thing is to do it right.
If you foresee a need for liquidity upon your death, whether it be to cover the taxes due on your estate or to facilitate a smooth transfer of your business, a life insurance policy with a substantial death benefit may be a valuable addition to your estate plan. The premiums associated with such a plan, though, can be costly. You may need to liquidate investments to cover the cost, potentially exposing yourself to gift or capital gains taxes and reducing your ability to take advantage of growth in your investment portfolio.
There is, though, an alternative, to help you avoid an undesirable selloff.
For high-net-worth individuals, one strategy that deserves your serious consideration is life insurance premium financing. By borrowing the funds to pay for the insurance premiums, you may be able to maximize the benefits of the life insurance policy, for both you and your heirs, and at the same time minimize your tax liability, while leaving in place your current investment strategy.
The tax code is complex, and each client’s situation is unique. Premium financing is potentially valuable for individuals with a net worth of $5 million or higher, trusts, corporations or partnerships with a desire or a need for a significant amount of life insurance, individuals who, given the illiquid nature of their estate, may not have the cash on hand to pay significant life insurance premiums, and those looking to create a future tax-free income stream.
Trying to determine the appropriate policy can be a complex and challenging undertaking, with the policy type and amount, ownership of the policy, and payment options based on your individual needs. While premium financing may be the right strategy for you, you need to look at the costs and benefits, and consider if you would be better served by paying the insurance premiums outright.
Choose the right advisors
To evaluate whether premium financing is right for you, you need to work with a knowledgeable team of investment professionals, someone qualified to consider the big picture of your individual circumstances. That’s where we come in.
You’ve worked hard to achieve success and financial independence. We’re here to help you keep what you’ve earned. Life insurance premium financing cannot and should not be considered in a vacuum, but must be evaluated as a component of your overall financial plan. To achieve the results you desire, this plan must be a dynamic document, adapting as needed to changes in your personal financial picture or the overall economy.
In working with highly successful clients, Generational Strategies LLC president and CEO Chris T. Christensen has stressed that it’s not enough to make a plan. He encourages audiences and clients throughout the country to constantly monitor and update their financial and estate plans, to ensure they offer maximum protection in an ever-changing environment.
Take advantage of this offer – schedule a complimentary, no-obligation private estate planning assessment and review. Meet with the firm that’s helped a significant number of people like you – high-net-worth individuals with concerns about generational issues – to safeguard and preserve their assets, and their family ethos, for the children and grandchildren. It may just help preserve something else that’s valuable and critical, too – your peace of mind.
Without advanced estate planning strategies, much of the significant assets you have accumulated may be lost to the taxman.Generational Strategies Group regularly assists affluent clients with sophisticated planning strategies, individually tailored to best meet your situation and your goals on how best to make a lasting impact. Some of the vehicles we use to assist our clients include:
- Dynasty Trusts
- Family Limited Liability Companies
- Qualified Personal Residence Trusts
- Irrevocable Life Insurance Trusts
- Charitable Remainder Trusts.
A carefully designed estate plan may include one or more of these estate planning vehicles, as well as utilizing life insurance premium financing. In addition, many of our clients create a private family foundation to receive a portion of their wealth, and have their children serve on the board to perpetuate philanthropy for generations.
We help our clients design a defensive estate plan that ensures that what they have gets to whom they want, when they want, and how they want, helping them pass the torch to the next generation, using sophisticated gifting strategies to help transfer business value without losing control. Your plan will be the ideal mix of vehicles to preserve, protect and perpetuate a lifetime of hard work to take care of those you care most about – children, grandchildren, and philanthropic causes.
In his decades of experience in the financial and estate planning field, Christensen saw far too many families failing to integrate and update the various pieces of their financial puzzle. He believes it is vital to take a more holistic approach, for clients to feel empowered about their life and legacy planning.
Chris Christensen works with all of his clients to make sure that those they care about – family, charity, and other beneficiaries – are properly taken care of, and that others – such as the IRS, creditors, and predators – are disinherited.
Avail yourself of this invaluable resource. Call Generational Strategies today at 239-352-4111 to schedule a private, no-strings estate planning assessment, and see if premium financing is right for you.
Remember – the estate tax is a voluntary tax on people who fail to plan, or hire the wrong advisors.
- estate planning